Proposed Legislation Could Change Self-Funded Insurance Plans

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    Employers with self-funded medical stop-loss plans could see significant changes to their healthcare in 2019, due to a bill that was proposed by Senators in September 2018. The bill is called “Protecting Patients from Surprise Medical Bills Act” and its intention is to help prevent the amount of bankruptcies filed by U.S. citizens due to unexpectedly high medical bills.

    If you look to read the bill at face value, it sounds great. The proposed legislation addresses balance billing, one of the main causes of patients being unable to pay for their hospital stays or other medical care. Balance billing occurs when a health care provider charges more than what an insurer reimburses to the patient. As a result, the patient is left with the balance, often unexpectedly and unable to pay. Thusly, bankruptcies and financial devastation can occur for these patients.

    The proposed legislation, if passed into law, would bring about the following changes when it comes to medical insurance billing:

    •      The insurer would be required to cover any out-of-network emergency bills that go over the cost-sharing amount of the patient’s plan.
    •      Out-of-network services that aren’t emergencies but are given at in-network facilities, the patient is only required to pay the agreed upon cost for in-network services.

    Lower-income Americans, especially seniors, would be protected under the Protecting Patients bill – in theory. If these patients find themselves in an ER that is out of network, their financial burden would be reduced. However, there are some potential issues that could eventually arise for insurers and subsequently employers. The trouble is that the funds to cover these medical bills certainly do not appear out of thin air. This proposed legislation would only place a cap on what the patient is responsible for paying, and not how much doctors, hospitals, and so on are allowed to charge for their services. In turn, the insurance company would have to pay the remaining balance.

    For patients, the changes that could come along with this new bill could mean savings on high-cost medical bills. For employers with self-funded stop-loss insurance, however, it might mean higher costs for insurance, meaning an increase in the amount employees must contribute. There are also issues that could arise due to the removal of consequences that patients may face for utilizing services that are out of network.

    These issues are speculative at this point, but it’s important for employers to stay up to date with the constant changes to healthcare. One of the sponsors of the Patients Bill, Senator Bill Cassidy has said that the bipartisan group will not bring the legislation to the attention of Congress until after January 2019.

    Like many areas of healthcare insurance, this new bill is confusing to the average patient and for some self-funded employers. At Prodigy, we take pride in our transparency as stop loss underwriters. We simplify potentially confusing healthcare jargon for our clients so they can get the best coverage possible. If you have any questions about how medical stop-loss insurance can help protect your business, contact us any time.

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